This chapter explores in detail the OE/S process. We will examine managerial decision making perspectives concerning this process; technologies available to support this process; and various models of this process (DFD's, ERD's, and system flowcharts). Finally the chapter will explore The Control Matrix for this process.
Order Entry / Sales Process Activities:
The order entry/sales (OE/S) process includes the first four steps in the order-to-cash process.
Pre-Sales Activities - these activities include responding to customers when they've inquired about items of interest or made requests for quotes on items of interest.
1. Horizontal information flow is the communication between departments that assist them in their repetitive work routines
2.Horizontal Information Flows (6), please describe them:
a. Flow 1 is a customer's order request for goods
b. Flow 2 has the sales order department request credit approval from the credit department.
c. Flow 3 is the credit department answering the sales order department's request.
d. Flow 4 has the sales order department acknowledge the order to four entities--the customer, the warehouse, the shipping department, and the accounting department (billing, accounts receivable, cash receipts).
e. Flow 5 is the warehouse filling the picking ticket and forwarding it to shipping.
f. Once the item(s) are shipped, the shipping department informs four entities that the shipment has been completed--the freight carrier, the billing/accounts receivable/cash receipts process, and the general ledger process.
Vertical Information Flows, explain: Vertical flows usually occur in a summarized format. In the OE/S process, sales data is captured in the sales order department and flows upward to managers within the marketing department and continues up the organizational heirarchy in increasingly summarized fashion to the CEO and ultimately to the shareholders in the audited financial reports.
Technologies Supporting OE/S Process:
The primary reason and critical success factor of the process is to satisfy customer needs correctly and efficiently. Knowing the customer includes who they are, where they are and what type of advertising will reach them the most effectively. The marketing department is the primary user of the customer data accumulated through the processes listed below:
Data Warehousing - The use of information systems facilities to focus on the collection, organization, integration, and long-term storage of entity-wide data. Data Watehousing provides users with easy access to large quantities of varied data from across the organization for the sole purpose of improving decision-making process.
Data Marts- A subset of an overall data warehouse customized for a specific department. Data marts are designed to provide detailed data for a specific set of users.
Data Mining- The exploration, aggregation, and analysis of large quantities of varied data from across the organization to better understand an organization's business processes, trends within these processes, and potential opportunities to improve the effectiveness and/or efficiency of the organization.
Customer Relationship Management ([[../../Chapter2 GSH#CRM|CRM]]) Systems and customer self service systems such as bank ATM machines rather than manual teller stations - CRM systems are designed to manage all the data related to customers, such as marketing, field service, and contact management data. The purpose is to cultivate the customer relationship by prospecting, acquiring, servicing and retaining customers.
Electronic Data Entry:
Bar Code Readers--Use light reflection that reads differences in bar code patterns in order to identify an item. Most retail establishments use these as their method of order entry in a customer transaction.
Optical Character Recognition or "OCR" Is used for pattern recognition of handwritten or printed characters. Ex. Customers write down the amount of the payment on the remittance slip when paying credit card companies.
Scanners--Are used to create a digital file from a printed image or document, which can then be stored and transmitted digitally.
The OE/S Process--Done in a Mobile Manner--Here is a link to one of the latest technological innovations that is becoming used more often in the order entry/sales process, and that is having the outside salesperson take orders through a PDA or other electronic device while the salesperson is at the customer's location. The salesperson can get a better idea of the customer's needs at their site, possibly leading to more orders as suggested by the salesperson. With mobile devices, the order can be taken at the customer site, possibly reducing the need for phone order entry personnel. This is a website for a company who helps businesses become more mobile in their transaction process: http://www.expertek.com/mobileworks.htm .
Digital Image Processing is the storage of information in the form of images rather than number and word data. Examples for banks are checks that are imaged and sotred for future customer retrieval on demand. Also is signature and loan documentation imaging which can be retrieved by bank employees when needed. This is particularly useful for tellers in the bank branch when they are presented with checks to be cashed. They have access to the original customer signature on file to verify the authenticity of the customer signature. Other examples are digital pictures of customers for use in ID.
Narratives of the OE/S Process:
Write narratives for each of the models provided in chapter 10 starting with:
OE/S Process Context Diagram: A customer places and order to the order entry/sales process. The customer recieves acknowledgment of the sales order from the OE/S Process. The OE/S Process sends notification of order to the Billing/AR/CR Process. The OE/S Process then sends a billing notification to the Billing/AR/CR Process. Then the OE/S Process sends a completed packing slip and bill of lading to the Carrier. After this the general ledger inventory sales update is sent to the General ledger process.
OE/S Process Level-0 Diagram
The customer places an order. The system checks availability of the items and displays them to the customer. The system updates the marketing data with the desired items. The system pulls the customer’s information and credit information to check their status. The sales order master is updated. A picking ticket is printed and a sales order notification is sent to the Billing/Accounts Receivable/Cash Receipts department. After the items have been packed, a clerk submits a completed picking ticket into the system. The system updates the sales order and inventory master data. A general ledger inventory sales update is sent to the general ledger process. A packing slip and bill of lading is sent to the carrier. The B/AR/CR department is sent the shipping’s billing information.
OE/S Process Level-1 (process 1) Diagram 1: - Validate Sales Order (Page 342).
The customer order is entered into the system and the system pulls the inventory master data to check for availability of the item requested. If the item is not available, a back order or reject process is initiated depending upon the reorder plans for that item, or if the item ordered is not available at all. The marketing data master file is updated with the customer order information. If the items are available in stock, the order is sent to the credit department for a credit check. The customer master data, accounts receivable master data and sales master data is pulled to review the customer credit profile and account status. If the customer credit is rejected, the sales order is not processed and an error routing is initiated. If the customer credit is approved, the order is processed by the system. The sales order master file data is updated, a picking ticket with the items ordered and relevant shipping information is printed and sent to the warehouse. Also, a customer acknowledgement and sales order notification are prepared and sent.
OE/S Process Level-1 (process 2) Diagram:Check Customer's credit 1.2 (Page 342). After inventory availability has been established, the customer's credit is verified. Credit can be checked in various ways. A very simple approach would be to compare the value of the goods plus other open sales orders plus accounts receivable balances (accounts receivable master data)to the customers credit limit (customer master data). If the customer is in good standing, this process updates the inventory master data to reduce the inventory for the amount on the order. The sales order master is updated to indicate that a completed sales order has been created. A completed sales order is disseminated. If the customer has inadequate credit, the sale is rejected and the customer is notified.
OE/S Process Level-1 (process 3) Diagram: Complete Sales Order 1.3 (page 342). A picking ticket is sent to the warehouse to authorize the staff to pick specific goods from the shelf and send them to shipping. A customer acknowledgment is sent to the customer to notify him of the order's acceptance and the expected shipment date. A sales order notification is sent to the billing department to notify them of a pending shipment.
OE/S System Flowchart:
Common data stores for the OE/S Process:
CUSTOMER MASTER DATA
INVENTORY MASTER DATA
MARKETING DATA
SALES ORDER MASTER DATA
ACCOUNTS RECEIVABLE MASTER DATA
Describe the data structures from the ERD model provided in chater 10:
- Customer Master Data - Contains a record of every customer with whom the Company is authorized to regularly do business. Each record includes a unique customer number and data that identify the particular charactistics of each customer, such as name, address, telephone number, industry, etc. It also stores credit data. Proper control techniques require that all such master data changes be documented, approved, and executed by someone other than the individuals who create sales orders, and that a report of all data changes be printed and reviewed periodically.
- Inventory Master Data - Contains a record of each item that is stocked in the warehouse or is regularly ordered from a vendor. The records are used to manage inventory, and they are a subsidiary ledger for the inventory account in the general ledger. Each record includes a unique item number, unit of issue, weight, volume, warehouse location, price, cost, etc.
- Sales Order Master Data - The data is created on the completion of a sales order. After the goods are shipped, the sales order record is updated. The sales order master data may include the time and date of picking, packing, and shipment of goods and who completed each step.
The Order Entry / Sales (OE/S) Process:
This chapter explores in detail the OE/S process. We will examine managerial decision making perspectives concerning this process; technologies available to support this process; and various models of this process (DFD's, ERD's, and system flowcharts). Finally the chapter will explore The Control Matrix for this process.Order Entry / Sales Process Activities:
The order entry/sales (OE/S) process includes the first four steps in the order-to-cash process.- Pre-Sales Activities - these activities include responding to customers when they've inquired about items of interest or made requests for quotes on items of interest.
- Sales Order Processing
This website explains the Sales Order Processing, click below: http://help.sap.com/saphelp_crm40/helpdata/en/1d/3117ee84ab1544b0422c84178e52d6/content.htm- Picking and Packing Goods
See micommerce picking and packing goods process, please click on the following website http://www.micommerce.com/default.asp?MIS=196Order Entry / Sales Process Information Flows:
1. Horizontal information flow is the communication between departments that assist them in their repetitive work routines2.Horizontal Information Flows (6), please describe them:
a. Flow 1 is a customer's order request for goods
b. Flow 2 has the sales order department request credit approval from the credit department.
c. Flow 3 is the credit department answering the sales order department's request.
d. Flow 4 has the sales order department acknowledge the order to four entities--the customer, the warehouse, the shipping department, and the accounting department (billing, accounts receivable, cash receipts).
e. Flow 5 is the warehouse filling the picking ticket and forwarding it to shipping.
f. Once the item(s) are shipped, the shipping department informs four entities that the shipment has been completed--the freight carrier, the billing/accounts receivable/cash receipts process, and the general ledger process.
Vertical Information Flows, explain: Vertical flows usually occur in a summarized format. In the OE/S process, sales data is captured in the sales order department and flows upward to managers within the marketing department and continues up the organizational heirarchy in increasingly summarized fashion to the CEO and ultimately to the shareholders in the audited financial reports.
Technologies Supporting OE/S Process:
The primary reason and critical success factor of the process is to satisfy customer needs correctly and efficiently. Knowing the customer includes who they are, where they are and what type of advertising will reach them the most effectively. The marketing department is the primary user of the customer data accumulated through the processes listed below:Narratives of the OE/S Process:
OE/S Process Context Diagram: A customer places and order to the order entry/sales process. The customer recieves acknowledgment of the sales order from the OE/S Process. The OE/S Process sends notification of order to the Billing/AR/CR Process. The OE/S Process then sends a billing notification to the Billing/AR/CR Process. Then the OE/S Process sends a completed packing slip and bill of lading to the Carrier. After this the general ledger inventory sales update is sent to the General ledger process.
OE/S Process Level-0 Diagram
The customer places an order. The system checks availability of the items and displays them to the customer. The system updates the marketing data with the desired items. The system pulls the customer’s information and credit information to check their status. The sales order master is updated. A picking ticket is printed and a sales order notification is sent to the Billing/Accounts Receivable/Cash Receipts department. After the items have been packed, a clerk submits a completed picking ticket into the system. The system updates the sales order and inventory master data. A general ledger inventory sales update is sent to the general ledger process. A packing slip and bill of lading is sent to the carrier. The B/AR/CR department is sent the shipping’s billing information.
OE/S Process Level-1 (process 1) Diagram 1: - Validate Sales Order (Page 342).
The customer order is entered into the system and the system pulls the inventory master data to check for availability of the item requested. If the item is not available, a back order or reject process is initiated depending upon the reorder plans for that item, or if the item ordered is not available at all. The marketing data master file is updated with the customer order information. If the items are available in stock, the order is sent to the credit department for a credit check. The customer master data, accounts receivable master data and sales master data is pulled to review the customer credit profile and account status. If the customer credit is rejected, the sales order is not processed and an error routing is initiated. If the customer credit is approved, the order is processed by the system. The sales order master file data is updated, a picking ticket with the items ordered and relevant shipping information is printed and sent to the warehouse. Also, a customer acknowledgement and sales order notification are prepared and sent.
OE/S Process Level-1 (process 2) Diagram:Check Customer's credit 1.2 (Page 342). After inventory availability has been established, the customer's credit is verified. Credit can be checked in various ways. A very simple approach would be to compare the value of the goods plus other open sales orders plus accounts receivable balances (accounts receivable master data)to the customers credit limit (customer master data). If the customer is in good standing, this process updates the inventory master data to reduce the inventory for the amount on the order. The sales order master is updated to indicate that a completed sales order has been created. A completed sales order is disseminated. If the customer has inadequate credit, the sale is rejected and the customer is notified.
OE/S Process Level-1 (process 3) Diagram: Complete Sales Order 1.3 (page 342). A picking ticket is sent to the warehouse to authorize the staff to pick specific goods from the shelf and send them to shipping. A customer acknowledgment is sent to the customer to notify him of the order's acceptance and the expected shipment date. A sales order notification is sent to the billing department to notify them of a pending shipment.
OE/S System Flowchart:
Common data stores for the OE/S Process:
- Customer Master Data - Contains a record of every customer with whom the Company is authorized to regularly do business. Each record includes a unique customer number and data that identify the particular charactistics of each customer, such as name, address, telephone number, industry, etc. It also stores credit data. Proper control techniques require that all such master data changes be documented, approved, and executed by someone other than the individuals who create sales orders, and that a report of all data changes be printed and reviewed periodically.
- Inventory Master Data - Contains a record of each item that is stocked in the warehouse or is regularly ordered from a vendor. The records are used to manage inventory, and they are a subsidiary ledger for the inventory account in the general ledger. Each record includes a unique item number, unit of issue, weight, volume, warehouse location, price, cost, etc.
- Sales Order Master Data - The data is created on the completion of a sales order. After the goods are shipped, the sales order record is updated. The sales order master data may include the time and date of picking, packing, and shipment of goods and who completed each step.